Importing from China to the UK: is import VAT charged on shipping too, and can I reclaim it?
Answer
Yes, shipping is included. The value for UK import VAT is the customs value plus transport, insurance, packing and commission up to the goods' first destination in the UK, plus duty and other import charges, then 20%. You can reclaim it: a business registered for UK VAT recovers import VAT under the normal input-tax rules, or uses postponed VAT accounting (PVA) to declare and recover it on the same VAT Return without paying upfront. Businesses not registered for UK VAT cannot use PVA.
- Applies to
- Businesses importing goods from China into the UK for resale (not parcels of £135 or less sold direct to consumers).
How the VAT value is worked out
| Added | Notes | Source |
|---|---|---|
| Customs value | Usually the transaction price | HMRC: working out the VAT value using the customs value |
| Transport, insurance, packing, commission | Up to the goods' first destination in the UK | Same; HMRC: VAT on imports |
| Duty, excise and other import charges | Not the VAT itself | Same |
Worked example
Goods £1,000, freight and insurance to the UK £150, duty assumed at 12% (check the UK tariff):
- Duty = (1,000 + 150) × 12% = £138 (duty is on the customs value including freight; UK rules decide)
- VAT value = 1,000 + 150 + 138 = £1,288
- Import VAT = 1,288 × 20% = £257.6
Can you reclaim it?
| Case | Reclaim? | Source |
|---|---|---|
| UK VAT-registered, goods for your business, you are the owner | Yes, under normal input-tax rules | HMRC: account for import VAT on your VAT Return (PVA) (updated 16 June 2025) |
| Using PVA | Nothing paid at import; declare and recover on the same Return; your VAT number goes on the import declaration | Same |
| Not UK VAT-registered | Cannot use PVA | Same |
| Postal items over £135 through Royal Mail | Cannot use PVA | Same |
Note: the old VAT Notice 702 was withdrawn on 1 January 2021; don't rely on it.
What you can do yourself
- Cost import VAT on "goods + freight and insurance + duty", not on the goods price alone.
- If you're UK VAT-registered, have your broker put your VAT number on the declaration and choose PVA.
- Download your monthly postponed import VAT statement as evidence for the reclaim.
When to use a licensed professional
- If you're unsure whether you count as the owner, or whether you can reclaim, talk to a UK accountant or tax adviser.
- To decide between PVA and paying at import, talk to a UK customs agent.
Check before you pay, and warning signs
- If someone offers UK VAT services, check their qualifications and which returns the fee covers.
- "Clear it under someone else's VAT number and reclaim it" is a warning sign.
Unknowns
- HMRC's current page on reclaim evidence (C79, postponed VAT statement): not opened this time.
- Update dates of the two VAT value pages: not read this time.
Contact us